Preet Kaur Gill, a British Labour Party member of Parliament from the greater Birmingham area, has said she plans to continue asking questions of the UK government on behalf of U.S.-born British citizens – like at least one of her constituents, who are facing unprecedented “negative financial implications” as a result of the way such individuals are pursued for tax by the U.S. authorities.
Gill's vow to continue speaking out on behalf of such dual U.S./British citizens comes as resistance is reported to be growing on the part of European governments to continuing to accommodate the American government’s extra-territorial tax enforcement efforts, which is currently done in part through intergovernmental agreements signed in the wake of the 2010 passage of the Foreign Account Tax Compliance Act.
Under FATCA, non-U.S. financial institutions around the world are required to report to the U.S. on those accounts they hold on behalf of American citizens. They do this by reporting the information to the authorities in the country in which the financial institution in question is located – which in turn, under the terms of the IGA, forwards the information to the U.S. Internal Revenue Service.
As reported here last month, a growing number of the more than 100 countries that have signed up to participate in a new, global automatic banking information exchange program modelled on FATCA, and organized over the last few years by the Brussels-based Organization for Economic Cooperation and Development, have begun to question the fact that the U.S. has opted not to participate – and is understood to be giving as its excuse the fact that it has FATCA, and therefore has no need to.
Such countries are said to be frustrated in particular because the U.S. has failed to "reciprocate" with respect to the information it receives from them through their FATCA agreements with the same kind of information on accounts held by their taxpayers in U.S. financial institutions.
Separately, recent efforts on the part of Europe's increasingly organized 'accidental American' population to seek the help of the governments of the countries in which they now live to speak out on their behalf – in the way Gill has done, with letters to U.K. Treasury and government officials – are also beginning to yield results.
As reported here in July, European lawmakers have begun responding to an increasingly-organized campaign by accidental Americans who have been seeking their help in their efforts to be allowed to walk away from their U.S. citizenships, and related tax obligations, more easily than they can now, on grounds that they have spent most if not all of their lives living outside of the U.S. On July 5, for example, the European Parliament unanimously approved a resolution supporting their cause, by a resounding 470 votes to 43, with 26 abstentions.
Among other things that resolution called on EU member states as well as the European Commission to re-open negotiations with the U.S. over FATCA.
'Accidental American' came to U.K. at 10 months
Gill, pictured left, who is shadow minister for international development, began her campaign on the 'accidental American' issue with a letter to Chancellor of the Exchequer Philip Hammond on Sept 3, in which she said that she was speaking out on behalf of a British citizen resident in her constituency.
He had been born in the U.S., she said, but was moved to the U.K. "only 10 weeks after he was born,” and, since last year, has been hit with significant financial repercussions due, she said, to his “automatic [American] citizenship,” and consequent tax obligations.
As a result of the Foreign Account Tax Compliance Act, which was signed into law in 2010, “my constituent is expected to provide an American Social Security number – which he does not have – or risk having his financial assets frozen,” Gill told the chancellor, in her letter.
“In order to resolve this issue, my constituent has to either spend a large amount of time and money registering for a Social Security number, submitting a minimum of five years of tax returns (at a high cost, via a U.S.A.-approved accountant) and continuing the process and cost for life; or paying US$2,350 to ‘renounce’ a citizenship that he has never wanted or used.”
As reported here last month, Gill received only a brief, written response to her letter – from a Conservative MP Mel Stride, who is financial secretary to the Treasury – that didn’t address her concern so much as clarify the way such ‘accidental Americans’ were “created”.
‘Will be following up’
Asked whether she intended to pursue the matter, Gill said that she did.
“As you note, the response to my written question is a little disappointing, so I will be following up with further questions,” Gill told the American Expat Financial News Journal, in an email response to a question on the matter.
As the local MP for accidentals such as the one mentioned in her letter to the chancellor, Gill added that she has "taken this case" onboard.
Gill noted that she followed up Stride's response with a second letter on the matter dated Dec 21, in which she referred to Rep. George Holding's Tax Fairness for Americans Abroad Act, and urged "that the U.K. Government do anything that they can to support this act, and to encourage the U.S. government to adopt it."
Gill said she has not yet had a response to this second letter.
No one knows exactly how many Americans currently live in the U.K., let alone how many are dual U.S./U.K. citizens, which most "accidentals" living in Britain would be likely to be.
Last year the UK’s Office for National Statistics estimated the number of “American citizens” (as opposed to “US-born” individuals) resident in the UK in the year ending in June 2017 as being “in the range of 121,000 to 157,000."
Another ONS estimate put the number of US-born immigrants resident in the UK in 2013 at 197,000. Some experts say the actual number is higher, however, as it would include students and others who don't appear in most official counts.
It is generally thought that most Americans resident in the U.K. live in or near London and the Southeast. In Gill's constituency of Edgbaston, a major local enterprise is the University of Birmingham, which among other things is known for having a particularly successful and well-established American football program, led by the university's Birmingham Lions team.
- FATCA hearing: Europe's 'accidentals' unleash frustration over official EU 'ignoring' of their struggles
- Canada sent 900,000 financial records to IRS for 2018 tax year: CBC News
- Accidental American 'Christine' on BBC Radio 4: 'tax slave for life'
- Dutch media highlight phenomenon of dual citizens renouncing U.S. citizenships
- Response from UK's Boris Johnson to MP enquiring on behalf of 'accidental' constituent